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Exam 4: The Market Forces of Supply and Demand

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Question 31

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Supply refers to the position of the supply curve, whereas the quantity supplied refers to the amount suppliers wish to sell.

A) True
B) False

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Question 32

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Price will rise to eliminate a shortage.

A) True
B) False

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Question 33

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Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Figure 4-2 ​ Consumer 1 Consumer 2 ​ ​ ​ -Refer to Figure 4-2. If these are the only two consumers in the market, then the market quantity demanded at a price of $6 is

Table 4-7 The table below shows the quantities demanded of milk per month by four families at various prices. $\begin{array} { | l | l | l | l | l | } \hline \begin{array} { l } \text { Price of Gallon of } \\\text { Milk }\end{array} & \begin{array} { l } \text { The Berman } \\\text { Family }\end{array} & \begin{array} { l } \text { The Johnson } \\\text { Family }\end{array} & \begin{array} { l } \text { The Harris } \\\text { Family }\end{array} & \text { The Patel Family } \\\hline \$ 3.00 & 9 & 15 & 12 & 14 \\\hline \$ 4.00 & 8 & 12 & 10 & 10 \\\hline \$ 5.00 & 7 & 9 & 8 & 6 \\\hline \$ 6.00 & 6 & 6 & 6 & 2 \\\hline\end{array}$ -Refer to Table 4-7. If the four families listed are the only demanders in this market and the price of a gallon of milk is $4.00, what is the market quantity demanded?

Suppose there are six bait and tackle shops that sell worms in a lakeside resort town in Minnesota. If we add the respective quantities that each shop would produce and sell at each of the six bait and tackle shops when the price of worms is $2 per bucket, $2.50 per bucket, and $3 per bucket, and so forth, we have found the

If something happens to alter the quantity supplied at any given price, then

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Figure 4-1 ​ -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by

Sellers respond to a surplus by cutting their prices.

If the demand for a product increases, then we would expect equilibrium price

Table 4-9 The following table shows the supply and demand schedules in a market. $\begin{array} { | l | l | l | } \hline \text { Price (\$) } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (units) }\end{array} \\\hline 0 & 50 & 0 \\\hline 2 & 40 & 15 \\\hline 4 & 30 & 30 \\\hline 6 & 20 & 45 \\\hline 8 & 10 & 60 \\\hline 10 & 0 & 75 \\\hline\end{array}$ -Refer to Table 4-9. What is the equilibrium price in this market?

Advances in production technology typically reduce firms' costs, which increases the quantity supplied at each price.

Which of the following is not an example of a market?

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

Suppose the number of buyers in a market decreases. As a result, would the demand curve in this market shift to the right or to the left?

A decrease in demand shifts the demand curve to the left.